In this article you will read about

• Pandemic related information in regions where Alfa Finance group operates,
• Information regarding business continuation in Poland,
• Major improvements in business conduct in Indonesia.

Pandemic related information

The numbers of COVID-19 are rising in Europe and in most of the regions across the world. According to Bloomberg.com the second wave of the virus is already there in Europe and the numbers are expected to continue rising. For Poland the most recent statistics are unchanged and the number is steady at a higher point. No substantial new restrictions are in place.

Indonesia experienced a spike in COVID-19 infected count. That was mostly related to public holidays in late August that were associated with more travel within the country and converted into an expected result.

As a result of increase in the number of infected people the municipal government of Jakarta, the capital of Indonesia, imposed a lockdown in a city restricting non-essential services from operating and advising work from home for most of the businesses. The restrictions are however much softer as they were before. Shopping malls are still open, while the number of people allowed in one room is limited. This however has not had a negative effect on the operations of Loan originator in Indonesia that will be elaborated in the following sections.

Business continuation in Poland

The loan issuing in Poland will not be resumed in the nearest time due to imbalance with the interest caps that were imposed due to evolving of the pandemic, and the associated risks. Currently, the staff and costs in Poland have been reduced to absolute minimum and only debt collection activities are being performed. The most efficient way of collecting the outstanding debt is by passing the debts to the court that was initiated already starting from May. Up to now approximately 65% of outstanding delayed portfolio is submitted in the court with the remaining 35% being submitted until the middle of October.

Due to specific court procedure effective in Poland, the outcome and recovery of delayed portfolio is expected to be relatively fast. Current experience shows that loan originator is receiving approximately 85-90% of positive court ruling already at the first try and they are immediately passed to bailiff for collection. Unsuccessful cases are resubmitted or passed on a standard court trial procedure that are a bit lengthier.

Typically, the process takes about 3 months from submitting the case to the court until the actual money coming in. According to calculation and submission dates it is expected that most of the initial stage of court collections will happen in a period from October 2020 until March 2021. Investors having investments in a delayed Poland portfolio should start receiving funds within this period. The process is performed by courts and bailiffs so these are irrevocable and will be executed without delay.

Business improvement in Indonesia

Loan Originator in Indonesia has learned a lot of lessons during the pandemic and has done a complete renewal of its scorecards. The effect is that since June they are experiencing an impressive increase in loan repayments and loan quality in general. The most riskier groups of borrowers that failed during pandemic have been identified and have been excluded. Also, in order to diversify and reduce credit default risk, Loan Originator now is issuing loans in other big cities in Indonesia.

Current default levels suggest that the company is on a very good track to grow its business again. As a result, the shareholders have already invested additional capital in the business to fund the issuing of new loans and growing the business. The shareholders have committed of investing up to 600 000 EUR during this period, with more than a half already invested.

New debt collection procedures have been implemented and they are already  showing positive results and some of the very old delayed loans are being recovered. After the initial trials these processes are being implemented as a standard and automatic procedures to streamline and scale the recovery. This in turn even more improves the recovery rate of all newly issued loans.

New contact information

We are kindly asking all investors to note changes in the phone number of our contact centre for Whatsapp and SMS messaging the new number is +371 28343947 The old number will still be operational for one month.

We encourage our investors to ask any questions to our client service personnel. We also encourage investors to check the validity of information should you get it from 3rd party sources as in some cases it may be misleading or imprecise. The best way to contact us is through email: [email protected]